Intro

What are we using this data for?

We are interested in the simulating tuna processing and the supplying of markets both local to the EPO and global. We are gathering two types of data here:

  1. Trade data: representing the yearly flows across countries
  2. Tariff data: representing the costs of moving product across each country

For the model, tariff data will be inputted directly as it represents costs and constraints that the supply chain faces. Trade data will also be directly inputted when it represents final consumption (sinks) or imports from abroad (sources) but will otherwise be used as a target for the model to replicate.

Very brief overview

The EPO tuna supply chain can fundamentally be split into 3 parts:

  1. The Ecuador cluster
  2. The Mexico cluster
  3. The Central America cluster

The Ecuador cluster imports raw material then process it for export. The imports appear to be chiefly from neighbouring countries as well as Spanish and Korean flagged vessels. Exports are concentrated in Europe but also to other American countries.

The Mexico cluster exports much less and in fact supplements some of its tuna needs (both raw and processed) from Asia.

The Central America cluster also process and exports, but has a much larger proportion of raw material being directly exported to Europe.

Outstanding questions

  1. Both the Ecuador and Central American clusters face no tariffs when exporting to Europe, but Ecuador exports far more and its exports are more concentrated in the processed stage. Is this due to:
    • Larger landings in Ecuador?
    • Larger canning capacity in Ecuador?
    • More productivity/lower costs for processing in Ecuador?
    • Vertical integration differences?
  2. Brazil, Argentina and Chile all offer a single tariff for all processed imports both from EPO and abroad (Chile in fact offers no tariffs on Ecuador’s imports). However, Brazil and Argentina primarily import from Ecuador while Chile imports mostly from Thailand. What explains this difference?
  3. Mexico imports 10,000t of yellowfin from Korea while exporting 8,000t of it to Spain. Are these import and exports of different kind of yellowfin, perhaps?
  4. As I understand it, Spanish flagged landings in Ecuador (or elsewhere) are considered exports from Spain, but I could not find a definitive reference for it. Does anyone have it?

Trade data

The trouble with Comtrade

Originally, I settled on using UN Comtrade data to gauge the flow of imports and exports in each EPO country and final markets. The problem with this data-set is that it is extremely inconsistent.

For example, in its import section for frozen raw skipjack (HS code 030343), Ecuador is listed as importing 86t from Spain, but Spain is listed as exporting to Ecuador 28,000t of raw skipjack. That’s a 3 orders of magnitude discrepancy. Even more blatantly, S. Korea claims to export 4,500t of raw skipjack to Ecuador but Ecuador does not list any import from Korea.

These discrepancies are usually “solved” by using some form of statistical reconciliation technique where the more a country’s reports fail to match their partners the less weighted their numbers become. The only “open” data-set that does this that I am familiar with is BACI.

This means that, the BACI data-set provides some weighted averages based on “believability” for each country. It claims that Spain exports to Ecuador 19,600t of raw skipjack, while Korea exports 4,600t. We will use these numbers for now.

Raw Fish

If we focus here on the five countries with the most cannery capacity in 2017 (Ecuador, Mexico, Colombia, Costa Rica and Venezuela) we see that:

  • Most trade occur for raw Skipjack and Yellowfin
  • Most trade occur in Ecuador and Mexico
  • Ecuador appears as both importer and exporter

It is a bit puzzling that some countries would both be importers and exporters of raw material, but most of it can be explained by looking at its destinations. In particular:

  • Yellowfin is often exported to Europe
  • Skipjack in Ecuador is exported mostly to other Latin American countries
  • Imports in Mexico are mostly from Asia (Korea or China)
  • Imports in Ecuador are primarily from Spain

My hypotheses mostly is as follows:

  • Imports from “Spain” are due to Spanish flagged boats operating in Latin America or WCPO
    • In 2017 there were about 12,000t landed in WCPO by Spanish boats plus another 5,600t locally within the EPO.
  • There must be some product differentiation in the yellowfin market where Mexico sells 8,000t of yellowfin to Spain and then imports 10,000t of yellowfin from Korea. (size differential perhaps?)
  • Some of the bilateral trading (Ecuador exporting 6,500t of skipjack from Peru and then importing 4,000t back) are probably just boats landing opportunistically rather than movement of goods from port to port.

Processed

Unfortunately both loins and canned tuna are included in the same HS code, which means that BACI aggregate their trade.
In general, Ecuador is by far the largest exporter, while most other countries import more than they export.

  • Ecuador main markets are European countries but also American countries (including the US)
  • Mexico imports from China and exports to US and neighboring countries
  • Colombia and Costa Rica import much from neighboring countries but little from WCPO.

Net trade

Imports - Raw Materials

Raw Materials - Export

Processed Imports

Processed Exports

Loins vs Canned Product

Most trade data is provided at the HS code level, which means that both loins and canned products are aggregated into a single number.
You can however get an idea of the split by looking at traded values per tariff line on the WTO data-base.
For example, the EU has 3 tariff lines specific to loins which together account for 42% of the trade (in $) between Ecuador and the EU. For the US however, Ecuador seems to be exporting almost only canned products (tariff line 16041430).

While the WTO does not provide the information by weight, this could in principle be estimated by looking at the difference in price between loins and canned product (which is available intermittently at GLOBEFISH).

No fancy pictures here because the data is all into pdf files which will require a bit to digitize.

Tariffs

WTO has good data on tariffs per type of item. If you just look at average tariff applied per item, you get:

Reporter Fish preparation Fresh Yellowfin Fresh Skipjack Fresh Bigeye Fresh offals Frozen Yellowfin Frozen Skipjack Frozen Bigeye Frozen offals Frozen fillets
Argentina 16.0 10 10 10 NA 10 10 10 NA 10
Bolivia, Plurinational State of 18.3 20 20 20 13.3 20 20 20 15.0 15
Brazil 16.0 10 10 10 10.0 10 10 10 10.0 10
Colombia 15.0 15 15 15 15.0 0 0 0 15.0 15
Costa Rica 14.0 0 0 0 6.0 0 0 0 7.7 14
Ecuador 30.0 0 0 0 NA 0 0 0 NA 30
El Salvador 15.0 0 0 0 8.3 0 0 0 8.3 15
European Union 24.1 11 11 11 10.0 11 11 11 10.0 18
Nicaragua 15.0 0 0 0 8.3 0 0 0 8.3 15
Panama 0.0 15 15 15 6.7 15 15 15 9.5 15
Paraguay 16.0 10 10 10 10.0 10 10 10 10.0 10
Peru 0.0 0 0 0 0.0 0 0 0 0.0 0
United States of America 11.7 0 0 0 0.0 0 0 0 0.0 0
Uruguay 16.0 10 10 10 10.0 10 10 10 10.0 10

Which follows generaly the principle of taxing lightly imports (particularly frozen) but taxing final products (fish preparation). However this is imprecise for two reasons:

So to be more precise, for the European Union you get:

  1. Frozen raw skipjack, yellowfin and bigeye are taxed at 0% if used for industrial manufacturing (for example TL 03034310)
  2. Because of the EU-Central America Association Agreement, Panama as well as Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua pay no tariffs exports to the EU for both processed and unprocessed.
  3. Ecuador, Peru and Colombia have separate agreements which also set tariffs to 0 for processed products.

Or in other words, the only EPO processors that faces full (24%) tariffs on exports to the EU are Mexico and Venezuela. Both for loins and canned products (but still no tariffs on raw frozen products).

For the United States you get:

  1. Loins are taxed at 6% or 12.5%, depending on the amount landed by each country.
  2. Mexico through NAFTA pays no tariffs on any product exported
  3. Colombia, Peru pay no tariffs for any export due to FTA.
  4. Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua pay no tariffs because of CAFTA-DR.
  5. Ecuador, Venezuela pays tariffs except for a few loins import (in tariff line 16041450) where due to GSP they pay no tariff
  6. Panama pays 1% tariff rates on all processed exports because of its FTA.

There are no preferential trade agreements with either Brazil or Argentina.

Chile offers a preferential agreement with Ecuador (no tariffs) while charges others 6%.